When we’re young, we dream about what our retirement might look like; maybe we’ll buy a home on a tropical island, relax on the beach and enjoy leisurely, sun-filled days. But as we age, making decisions about where we will choose to live during our retirement can become more complicated. Budget, lifestyle and family ties must all be taken into consideration when choosing where we retire.
As you begin planning for where you will live in retirement, consider these housing options:
- Move to a Location with a Lower Cost of Living: While living in the house that you raised your family in might seem appealing, it may become an added expense – or even a burden– as you age. If you no longer need a large home, consider moving to a smaller house, or to a new location altogether, that offers a lower cost of living. Moving could be an exciting way to transition into retirement and may allow you to spend less money on your home and more on enjoying your retirement.
- Rent Property: If you’re not ready to sell your larger home but no longer need the extra space, consider renting part of your home to a tenant. This creates an additional source of revenue which can be used for home maintenance and expenses, some of which may now become deductible against the rental income you receive. Or, if you’re ready for a mortgage-free lifestyle, consider renting a smaller home or apartment instead of buying to give yourself increased flexibility as your needs and desires change.
- Consider Intergenerational Living Arrangements: Moving in with an adult child, or having them move in with you, has become a popular option in recent years. Intergenerational homes can offer families the opportunity to save money while spending quality time together. But remember: moving in with family can come with its own set of challenges. If you need regular medical assistance, for example, you might want to consider alternative long term housing options to avoid potential conflicts with your children.
- Choose a Continuing Care Retirement Community: Continuing care retirement communities offer residents the opportunity to live independently for as long as they can, but also having access to increased assistance as they age. While this option can be expensive, it is a great way to “age-in-place” and offers a safety net for retirees who want to retain their independence but want to have the peace of mind of knowing they have a plan to receive additional care and support should they require it.
Consult a CERTIFIED FINANCIAL PLANNER™ professional to help determine a living arrangement that best suits you and your family’s needs in your retirement. He or she will be able to help you consider your different housing options and their associated costs.